Protect Yourself from Scams
Unfortunately, scams and fraudsters are a persistent threat whenever money is involved. Given the significant sums that can be saved over time in pension pots, these can be specifically targeted by unscrupulous individuals. Don't let a scammer ruin your retirement.
What are the warning signs of a scam?
- An offer of a better guaranteed return on your pension savings.
- High-pressure sales tactics.
- Unusual investments, which tend to be unregulated and high risk.
- Complicated structures – so it isn’t clear where your money will end up, or several parties taking a fee meaning the total amount deducted from your pension is significant.
What is an early release pension scam?
- An offer to help you release cash from your pension before you are 55.
- It often involves transferring your pension savings and you may be offered a loan.
- It’s almost certainly a scam – you can only take money from your pension when you are 55 (increasing to 57 in 2028) or older.
- You could inadvertently face a tax bill of 55% on what you have withdrawn, even if you didn’t realise that you had broken the tax rules.
What is a pension review scam?
- An out-of-the-blue offer of a free pension review.
- The company contacting you may falsely claim they are authorised or claim that they don’t have to be authorised.
- You may be offered guaranteed returns or a cash incentive to tempt you to take up the offer.
- Typically involves unusual investments, which tend to be unregulated and high risk.
- Some of these are poor value and speculative investments, whilst others are just outright scams.
Where can I find out more about scams in general?
The financial services regulator's scams guidance can be found here.
How to protect yourself from pension scams
- If you get a cold call about your pension, the safest thing to do is to hang up.
- Only take advice from authorised firms – you can check a firm's status here.
- If it sounds too good to be true, it usually is:
- Professional advice on pensions is not free.
- Guaranteed, high returns are normally unrealistic.
- There is no loophole that allows early access to pension savings before age 55 (although early access can be permitted on ill health grounds).